The National Assembly has revived the proposal for a 5% excise duty on telecommunications services, gaming, betting, and lottery activities in Nigeria, despite a previous exemption granted to the telecom sector by former President Muhammadu Buhari.
On July 6, 2023, President Bola Tinubu signed four executive orders, including one that suspended the 5% excise tax on telecom services to alleviate the impact of tax increases on businesses and households. However, a new executive bill titled Nigeria Tax Bill 2024 seeks to reintroduce this excise duty.
According to the provisions of the bill, the excisable transaction amount will be determined based on the charges imposed by the service providers, whether in monetary terms or equivalent value. The bill specifies that services such as telecommunications, gaming, gambling, betting, and lotteries provided in Nigeria will be subject to excise duties at rates outlined in the Tenth Schedule of the Act.
Furthermore, the bill includes regulations regarding currency exchange transactions involving the naira. It mandates that these transactions must not exceed the prevailing exchange rate in the official market, as authorized by the Central Bank of Nigeria (CBN). If a transaction’s exchange rate surpasses the official market rate, the excess amount will be considered an excise duty payable by the seller, assessed under the Nigeria Tax Administration Act.
The revival of this proposal has raised concerns among stakeholders in the telecom sector, who argue that it could impose additional financial burdens on consumers and businesses already grappling with rising operational costs.